My Q3 2015 column for Professional Manager Magazine
Imagine a car advert. For any brand, for any car. Chances are there are young people involved, enjoying an active lifestyle with their friends or, perhaps, a young family. Here’s what I guarantee you won’t see. Old people. Probably anyone over the age of 40, in fact. Car adverts don’t feature old people, yet older people buy all the cars.
While everything in car advertising might tell you that the markets manufacturers seek most are towards the younger end of the spectrum, it makes sense to keep a healthy customer base in the older bracket. With an ageing population – and the silver pound more disposable – it’s manufacturers who can attract buyers that see value, safety and practicality as key buying factors. Empty nesters – or baby-boomers – are where the easy money is for car-buyers.
What’s more, the amount of young people owning licenses has dropped sharply over the decades. WIth improvements in public transport and private transport such as Uber to the fore there’s not as much pressure on youngsters to buy new cars. Assuming they can afford them – or even want them.
Demographics drive car-building. Their demands, needs, desires and buying power. It’s why we’re now seeing Land Rover making smaller, cheaper cars aimed at the female market such as the Range Rover Evoque; why Lexus, Audi and Mercedes are hoovering up sales in the small family car sector; why BMW is building a front-wheel drive MPV.
Some of the ideas are anathema to some petrolheads, but the requirement for smaller, cheaper, more individual cars from a fragmented public has driven manufacturers to look at different niches, sectors and markets. In a buyer landscape so massively disrupted, manufacturers must adapt to the demands of buyers or die out.
And, though you may not have noticed, it’s happening. The rear-hinged doors on the Vauxhall Meriva, higher seating position, lower boot lids – they’re all aimed at being friendlier to the more mature driver. At the extreme end of the scale you have cars such as the Renault Scenic or Toyota Auris – basically Eastbourne on wheels.
Many fleet and business drivers are likely to be what are now called Millennials in the next decade: 18-40-year-olds with a significant interest in music, new technology and assorted media. Tech-savvy and consumption-driven, they’re the perfect audience for the new generation of smart cars.
Let’s not forget another huge tranche of buying power: parents. Women are now more likely to buy family cars primarily used for transporting the little ones to school, gymkhana and ballet classes – so it makes sense that car-makers market directly to them, making a big deal of safety, practicality and versatility. a June 2012 Nielsen survey of visitors to US automotive websites indicated that the 35-64 age group were more likely to be women than men.
Manufacturers don’t always get it right though. Volvo almost underwent the equivalent of a nervous breakdown a few years ago with its misfiring Naughty Volvo marketing campaign. Thankfully order was soon restored and the Swedish brand was back to doing what it does best. But there’s often a sense among manufacturers that they rail against what their data is telling them. The manufacturers that seem most at ease with their brand offering – and their customer needs – tend to prosper.
It’s the same with buying cars for a fleet – and it might give you the wake-up call you need if you’re thinking of plumping for something that is going to be a hard sell to the spouse. Everyone may demand a smart new exec – something German or Italian perhaps – but demographic data may tell another story. Good car reviews will give at least an indication of what age group a car might suit – or what uses it’s best for.
Car manufacturers have thrived by understanding that the market has driven new and different requirements from them. Reading that demographic data – and being able to make sense of it – has allowed them to remain relevant. Reverse engineering that data – perhaps your own data – can help you understand which car is really right for you.
In The Black
Diesel engines are under the microscope for their pollutants – so what do you need to know?
Attention has been slowly but surely turning towards diesel cars, as European capitals including London register worrying levels of particulates in the atmosphere. The reason is fairly simple. While diesels are heralded for their low levels of carbon dioxide – at least compared to petrol – they emit other nasties such as particulate matter, plus nitrogen and suplhur dioxides that are bad news for those suffering from respiratory illnesses such as asthma.
The question is, having incentivised the take-up of diesel engines through attractive tax rates for fleet and business users in an attempt to reduce CO2 emissions – diesel and petrol sales for new cars are close to parity these days – will the EU now legislate to punish diesel drivers?
Not likely. The vast amounts of cash tied up in creating more efficient diesel technology have driven down CO2 emissions and scrubbed a lot of the nasties in more advanced catalytic converters, virtually eliminate turbo-lag and made driving an oil-burner as refined as a petrol. As such the car industry – not to mention the oil industry – would view that very dimly.
There’s another problem. Homologation – a posh word for standardisation – means that all emissions tests run in laboratories to ensure a level playing field. But – as a result – the figures bear little similarity to the reality. For the same reason you will rarely achieve anything like the official fuel economy on any car. The EU has recently realised that not only are its emissions figures for diesel pollutants wrong, they’re so wrong that current cars could never hit modern pollution targets. This means there’s a very real possibility that, despite recognising the danger to public health posed by diesel fumes, emissions targets could increase, rather than decrease before 2020.
Confused? Join the club. My advice is not to worry if you’re considering buying a diesel – or even a fleet of them, as emissions targets are unlikely to affect you anytime soon. But do service diesels properly, make sure they get regular long runs at motorway speeds to burn off nasties and ensure drivers understand the benefits of eco-driving. Diesels may be complicated machines, but they’re still machines. As ever, it’s how we use them that counts.